UK broadband prices could drop after regulator announces wholesale price cut

The UK telecoms regulator Ofcom has said it will be forcing down the prices that Openreach, the wholesale division of incumbent BT, can charge for broadband and telephone rental. However, BT intends to contest the decision.

The proposed charge controls would reduce the cost of a “fully unbundled line” from £91.50 to £87.41, while a shared unbundled line, where an ISP uses the line just to provide broadband, would drop from £14.70 to £11.92. The cost for phone rental services would drop from £103.68 to £98.81.

Ofcom said it has provided the European Commission with a draft of its decision, which it deems necessary due to Openreach’s significant market power. The charges would be imposed for the 2012/13 financial year and would run until 31 March 2014. Prices could decrease further in line with the Retail Price Index. The charges will only kick-in once they have been approved by the European Commission, which Ofcom said would occur in March.

How this will affect consumers is unclear as the Ofcom proposals do not force the purchasers of Openreach’s wholesale services to pass on savings to their customers. If they do however, it could mean customers of Openreach based broadband would see price drops.

However, BT has hit back at Ofcom over the decision, issuing a statement of its intentions, which could include appealing the decision.

“We disagree with some of the underlying assumptions that they have used to determine these charge controls. Our primary concern throughout this process is to ensure that we are able to achieve a fair rate of return in order to continue our investment in the future of the UK’s communications infrastructure,” read the statement.

“We will consider all options available to us, including appealing, after Ofcom confirms its final decisions.”

Last week, Openreach announced that it would make Fibre-to-the-Premises (FTTP) services available in six locations in the UK from late October, making download speeds of up to 110Mbps available, with 300Mbps upgrades coming by spring 2013.

The Broadband MEA conference is taking place on the 25-27th March 2012, at the Westin Mina Seyahi Beach Resort and Marina, Dubai, UAE. Go to the website now to register your interest.

Sky is looking to head off Netflix, as the UK's goto choice for internet based TV and movies

Sky, the UK TV broadcaster and ISP, has announced that it is adding a fibre broadband product to its internet packages, while also for the first time offering an á la carte internet TV service to compete with UK newcomer Netflix.

Sky’s fibre service, based on UK incumbent BT’s wholesale network, will offer download speeds of 40Mb at a cost of £20 per month, undercutting BT. Sky said that the fibre package would be available  from April to 30 per cent of UK homes, and that this would increase in line with BT’s fibre rollout.

Aside from fibre, the company also announced plans to make its ADSL2+ service available to 88 per cent of UK homes by June 2013. The move follows a strong quarter for Sky, who said in the last three months of 2011 added 166,000 new customers to its ADSL broadband service.

Outside of the home, Sky said all of its customers will be able to make use of a public wifi service, powered by The Cloud, the UK wifi provider it purchased in January 2011.

“This year sees a number of enhancements that will ensure we create even more choice”, Stephen van Rooyen, managing director of Sky’s sales and marketing group said in a statement. “Whether it’s the launch of free public wifi, extending our network into more parts of the UK, or adding fibre to our product mix, we are focused on meeting the demands of customers and on being their number one choice for home communications.”

Sky, predominately a satellite based broadcaster, also said it was bringing an internet TV offering available to everyone in the UK, even if they were not Sky customers. Movies will be available at launch on a monthly package unlimited access basis or for one off rentals, with sport and general entertainment available at a later date. The service is set to arrive in the first half of 2012 on a range of devices, from PCs and Mac to phones, tablets and games consoles.

The move is a clear shot across the bows of Netflix, which after shaking up the pay TV landscape in the US is seeking to do the same in Europe, launching in the UK in early January. Commenting on the plans Sky’s chief executive, Jeremy Darroch said in a statement: “This exciting new service will offer some of Sky’s most popular content through a wide range of broadband connected devices. Alongside the continued growth of our satellite platform, this will be a new way for us to reach out to consumers who love great content, but may not want the full Sky service.

Completing it response to rival online services, Sky announced that the popular iPlayer service, from its broadcast rival the BBC, would finally be available as part of its Anytime+ internet based catch-up service, which launched as a Sky Broadband exclusive offering in October 2010.

The BBC said that it was now willing to make its iPlayer service available to Sky due to the latter opening up Anytime+ access to all ISPs, rather than just customers using Sky Broadband. “A core BBC value is to reach all audiences on a universal basis, so Sky’s plan to make Anytime+ available to customers regardless of their internet provider is an important development in helping to bring BBC iPlayer to around 5 million new homes in 2012 – at no extra charge,” the BBC said in a statement.

The Broadband MEA conference is taking place on the 25-27th March 2012, at the Westin Mina Seyahi Beach Resort and Marina, Dubai, UAE. Go to the website now to register your interest.

Virgin Media has said it will double cable broadband speeds in the UK for free over the next 18 months

The speed boost will begin in February 2012, but take up to 18 months for the upgrade programme to be complete. Upload and ‘fair usage’ limits will be “increased in proportion” to the new headline download speeds.

The move is designed to ensure Virgin Media remains top of the broadband speed tables ahead of UK incumbent BT, which has been pushing its own fibre-optic service branded ‘Infinity’. This currently tops out at 40Mbs but  BT has announced plans to take this up to 100Mbps.

Virgin Media chief executive officer, Neil Berkett said in a statement that “the internet has become an integral part of our social, work and family lives, so we think our customers are going to love this.”

“As people are increasingly doing more online, and getting connected to the internet with lots of different devices, having a fast, reliable broadband service should not be a luxury. We want to make sure that consumers have access to the best value broadband service and that means a superfast connection.”

The move was also welcomed by the UK government and British Prime Minister David Cameron commented: “I welcome this announcement from Virgin Media; it will provide a great boost for the economy and change the way many households, consumers and businesses use the internet. Rolling out superfast broadband across the country is a critical part of our plan to upgrade the UK’s infrastructure and build a new and smarter economy.”

Virgin Media has launched a marketing campaign to promote the speed boost with 100m world record holder Us ain Bolt with the slogan ‘’Keep Up’ with Virgin Media’. However, the company will need to improve its marketing communications after an email gaff to many of its customers over the weekend promised an increase from 100Mb connections to 120Mb, when they were not actually 100Mb customers at all. A second email quickly followed apologising for the error but stating that, “rest assured current Virgin Media cable Broadband customers will be receiving some good news about their Broadband in the next 2 weeks.”

The Broadband MEA conference is taking place on the 25-27th March 2012, at the Westin Mina Seyahi Beach Resort and Marina, Dubai, UAE. Go to the website now to register your interest.

Nima Pournejatian is chief technology officer of Iran’s MobinNet, the countries first and only WiMAX operator

For a company that is just a year-and-a-half old, Iran’s newest broadband player has certainly made its presence felt in its local market. Since the service was launched in August 2010, MobinNET has picked up 130,000 subscribers. The attraction of the company for its customers is that in a country where fixed line connectivity is relatively scarce and expensive, MobinNET offers the flexibility of wireless WiMAX connectivity to homes and mobile users, at an attractive price.

As such, MobinNET expects to increase its customer’s base to 160,000 customers by the end of March 2012, as its CTO, Nima Pournejatian tells Telecoms.com. It offers a number of packages for both consumers and businesses, while corporate customers can access high-level features such as dedicated point-to-point bandwidth and Enterprise Layer-3.

As a WiMAX player it is purely a data play at the moment, but a VoIP service will also be introduced in the near future. MobinNet offers speeds ranging from 128kbps to 2Mbps packages with and without download restrictions. The speeds might not be outstanding compared to the world’s fastest networks but in terms of wireless connectivity but it’s still welcome when there’s not a huge amount of choice. As WiMAX Pournejatian explains, there are no 3G operators in Iran, so WiMAX is a great solution for providing mobile broadband to eager customers. “If you look at the Iranian telecom market and infrastructure you’ll understand that there’s a lack of cable infrastructure. In European countries there are cable companies that are providing service but we don’t have that here.”

The fast expansion of fibre-optic connectivity for landline telephony is ironically boosting the attraction of WiMAX, as fibre optic connections are too expensive for consumers as a data connection, and there is no ADSL network to provide an affordable alternative.

“The ADSL implementation in Iran is restricted, because there is no copper network. There is a limitation in that [fibre optics] cannot provide ADSL – so it’s an advantage for WiMAX. You can install a modem and CPE for user and they will use the service. It’s a unique opportunity in the Middle East because of the geographical area and the population [distribution] that we have, and an advantage over the cable and copper based technologies.”

Consumers inevitably face restrictions on the certain types of traffic – P2P in particular. “Most traffic is HTTP and P2P. We have a limited amount of P2P traffic as if we open it, it will fully utilise our bandwidth. Bandwidth in Iran is very expensive compared to other countries so we need to limit this.”

Pournejatian explains that its day-to-day challenge is keeping its 450 base station strong multi-vendor network running smoothly.  “We’re the first WiMAX operator to have launched a multi-vendor integration operation. Because WiMAX technology is not as mature as 3G, or 2G, so multi vendor is a real challenge for us. As far as we know, we’re the only WiMAX operator that has three vendors on the active layer.”

The reason for this is that MobinNet wants to keep its suppliers on their toes. “We don’t want to be a single vendor and we want to keep the competition going and not depend on one vendor. Huawei is providing core, plus access and transmission network, and Samsung and ZTE are providing access plus related transmission equipment – base stations and microwave related transmissions.”

The major progress coming to MobinNet is the adding of VoIP services, which will help lower the cost of international calls for customers. “In our license we have the capability and permission to offer voice services, so we are going to launch [them] in the next couple of weeks so we can offer unmetered international calls.

As with all data enabled offerings MobinNET offers a feature enabling them to connect multiple devices via short range wifi.  Other innovations in the market are the introduction of WiMAX for IPTV services, and Iranian consumers are now able to buy Samsung smart televisions with MobinNet WiMAX CPEs attached for access to Video on Demand services.

“Right now if you look at our service it is mostly HTTP browsing and P2P. But in near future, I predict this would be more video traffic as well. Using interactive right now is a challenge and a subject to investigate. I predict that VoD will dominate. Right now we have bundled our TVs with one of the Smart TVs in the market and they are using our service as their internet.”

While MobinNet’s WiMAX service has got off to a successful start, it’s clear that the momentum worldwide is behind LTE mobile technology. Clearly this is a strategic business decision rather than a purely business one, and Pournejatian’s comments, “I don’t know if we’ll have a LTE bid or not but if there is, we will bid. We are investigating right now, but we have not decided. We look at some WiMAX operators right now that are moving to TD-LTE and it could be done for us as well. The major concern is that there will not be enough terminals in the market that will work on TD-LTE and at 3.5GHz – so that’s where we need to focus. Plus, we are analysing the FDD version of LTE as well. There will be a need for more investment in new spectrum I think.”

It is to help make this type of decision that is actually drawing MobinNET to attend events such as the Broadband MEA conference. “We are looking to see what the other broadband operators do and what the LTE and WiMAX operators do. We would like to see people at C-level and to talk with them to see their strategies, what they are looking for in all parts of the business – the network side, the IT side,  the marketing as well. We think [about] networking with others and also to listen and watch the presentation from operators and vendors to decide what technologies to use. We need to understand what type of marketing campaigns can be used – I think it will help us lots.”

The timeframe for this transition is likely to be the second half of the year, and if it happens there will effectively be two networks running at the same time but Pournejatian doesn’t think this will be a problem. “As far as the air interface is concerned WiMAX is very similar to LTE. So there are many common points. Both of them use as IP core and the transmission network is common to both technologies.  The only difference is the access layer. Even at the access layer both of them use OFDMA.”

Nima Pournejatian is the chief technology officer of Iran’s MobinNET Telecom and is speaking on day one of the Broadband MEA conference, due to be held  on the 27th March 2012, at the Westin Mina Seyahi Beach Resort and Marina, Dubai, UAE. Register your interest here.

Jayhun Mollazade, CEO of Azqtel. Its WiMAX network covers the city of Baku, Azerbaijan

Jayhun Mollazade, CEO of Azqtel, was a man with a vision. As an Azerbaijani citizen living in the USA he saw an opportunity to dramatically improve the ageing and archaic soviet telecoms infrastructure of the former Soviet state.

Over the past five years, Azerbaijan has put an emphasis on developing its ICT sector and as a result the country now has three mobile carriers along with several ISPs offering ADSL based fixed-line internet connectivity. But while the broadband market was growing by 30-40 per cent each year only one of the local carriers was offering 3G services and Mollazade and his partners saw that there was a real opportunity to offer high speed wireless data services.

At that time though, while LTE had a large amount of buzz and expectation about it, as far as building a real-world commercial network, the only real game in town was WiMAX as Mollazade told Telecoms.com. “In 2009 there were discussions about LTE at the Mobile World Congress, but WiMAX was more established with certified products and affordable prices – LTE was more like something which may come. [When it did] the equipment, modems, end-user device – all of them were exorbitantly expensive, so we decided to go with WiMAX and to gain a customer base of subscribers.”

Initially, Azqtel’s licence only covered downtown Baku, the capital city of Azerbaijan, but in 2010 the service raised funds and was relaunched under the brand name Sazz, as a service that now covers the metropolitan areas of the capital Baku, and the nearby town of Sumquayit, covering a total of around four million people.

The service currently offers speeds of 10Mb/sec, which is on par with the real world speeds seen in most LTE networks running round the world. The price of 25 New Manat, around US$32, is affordable. Mollazade told Telecoms.com that the service has picked up thousands of customers in the past year, and is already cash-flow positive.

However, on a global scale it’s clear that while the winds of technology are driving the LTE ship forward at a pace, WiMAX is virtually dead in the water. What then are Azqtel’s contingency plans for the future?

“We are looking in the next couple of years to be in line with the wireless capabilities of broadband”, admits Mollazade. “But we haven’t made any specific decisions”, he adds. “Technology always changes. Maybe five years from now there might be something different.”

Mollazade tacitly admits though that a transition to LTE is very much on the agenda, though exactly what it does choose to do is tied to what happens in terms of spectrum. As a WiMAX operator, Azqtel has a generous 60MHz of 3.5GHz, and though that’s frequency that isn’t widely deployed for LTE it’s an option it would take up if it could. “WiMAX operators round the world are at 3.5GHz and all of them, including us, are really strongly urging vendors to come up with a migration for LTE based on 3.5GHz. However, if we decide to go to LTE we would ultimately require LTE licenses if 3.5GHz is not going to work for us.”

“It’s all going to depend on a number of factors. Whether LTE will be available on 3.5GHz or not, whether we can acquire 2.6GHz or 2.3GHz or 700MHz frequencies. Or whether we need to skip all of this, and wait for LTE Advanced. We are weighing all options. But at the moment the customers in Baku are happy with what we are offering.”

In particular they are happy with the fully unlimited service that they currently enjoy. Is that a situation that Mollazade thinks is sustainable going forward? “It’s a true unlimited. In our legal contracts we warn that we may restrict user torrents, but quite frankly at this early stage, we don’t have any policies. As an operator we will be looking into given priority to VoIP over browsing and over YouTube, so at the moment we are looking at different technologies that will give us a DPI solution. However, at the moment with WiMAX we think we can keep unlimited. That gives us an advantage. The other carrier’s unlimited [services] are twice as expensive.”

In the meantime though, the focus is on expansion with the aim to move beyond its current city limits. “We are planning to expand nationwide. We have secured some contracts on education, in health and sports. We are planning in 2013 to go beyond the capital. Azerbaijan has a developing economy, but there is a need for broadband in the second, third and fourth cities. And we have a plan to deliver triple-play across the nation.”

Mollazade is quick to highlight the advantage its service has over the rival fixed-line ADSL services. “ADSL customers have to wait for a couple of weeks for it to come to them. And they normally get half [the performance] that they pay for – and we add a nomadic experience. So for a quality, speed and price perspective I think we are more competitive.”

The big challenges over the next 12 months Mollazade says will be keeping a close watch on capacity, particularly as its customer base grows in order to maintain the three pillars the company is based on, good service, affordability and good customer support.

Mollazade is enthused about the possibilities that Broadband Middle East and conference, taking place in Dubai in March will provide, such as the chance to learn first-hand about how others in a similar position have dealt with change. “We are also curious to know about the experience of others, so we are looking at Sprint and Clearwire and P1 and Yes in Malaysia.

He also is enthusiastic about selling the benefits of the Azerbaijan market, which with its oil and gas economy presents an economy with great investment potential. “The market has not reached yet its potential in terms of its subscribers. It’s still in play, and I would urge investors and technology groups and applications service providers to look at this market with more attention. It’s has huge infrastructure development based on oil and gas cash. There are opportunities here.”

Jayhun Mollazade, CEO of Azqtel is speaking on Day One of the Broadband MEA conference, taking place on the 25-27th March 2012, at the Westin Mina Seyahi Beach Resort and Marina, Dubai, UAE. Go to the website now to register your interest.